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Steps to Select the Best Health Insurance Plan

Facing a constant 14% yearly increase in medical costs makes health insurance feel more like a precarious tightrope walk than a safety net. Getting a full claim might seem like a distant goal, but it’s essential to realise that careful planning and making informed choices before getting a policy are your real keys to dealing with the rising challenges of healthcare expenses.

Forget about one-size-fits-all solutions; handling claim intricacies requires a sharp eye for hidden exclusions, a realistic evaluation of your needs, and a focused understanding of how your premium, coverage, and network hospitals interact. Only by staying vigilant and fully grasping the ever-changing healthcare landscape can you ensure that your claim doesn’t end up as a casualty of unexpected pitfalls.

3 Important ratios to select Insurance company 

  1. Incurred Claim Ratio (ICR)

It acts as a financial health barometer for insurance companies, reflecting the proportion of premiums paid out in claims during a year. Ideally, this ratio should fall within the range of 50% to 90%. Going above 90% raises concerns about potential losses and possible premium hikes while dipping below 50% suggests a reluctance to settle claims, impacting customer trust and business sustainability. Therefore, maintaining a balanced ICR is crucial for both the insurer’s financial stability and policyholder satisfaction.

Insurance Company 2017-18  2018-19  2020-21  2021-22 
Aditya Birla Health Insurance Co. Ltd. 89% 59% 49.99% 69.56%
Care Health Insurance Ltd. 46% 62% 55.15% 65.07%
ManipalCigna Health Insurance Co. Ltd. 62% 63% 61.13% 76.17%
Niva Bupa Health Insurance Co. Ltd. 50% 54% 56.09% 62.12%
Reliance Health Insurance Ltd. 52% 55% 45.68% 196.55%
Star Health and Allied Insurance Co. Ltd. 62% 63% 94.44% 87.06%


2. Claim settlement ratio

The Claim settlement ratio is the % of claims that an insurance provider settles in a year out of the total claims. Looking at the following table the real picture is reflected in the COVID pandemic as it showed the actual pressure of insurance companies in 2020-2021.

Check: Health Insurance – Claim Settlement Ratio

Insurance Company  2019-2020  2020-21  2021-22  2022-2023  First 3 months of 2023-24 
Aditya Birla Health Insurance Co. Ltd. 72.80% 49.99% 99.41% 94.00% 99.36%
Care Health Insurance Ltd. 92.58% 55.15% 99.00% 99.00% 100.00%
ManipalCigna Health Insurance Co. Ltd. 84.93% 51.66% 99.90% 99.00% 99.96%
Niva Bupa Health Insurance Co. Ltd. 83.92% 56.09% 99.99% 99.22% 99.91%
Reliance Health Insurance Ltd. 98.65% 100.00% 100.00%
Star Health and Allied Insurance Co. Ltd. 78.15% 53.64% 99.00% 90.00% 99.06%


3. Repudiation claim ratio

A repudiated claim means that the insurer thinks that the claim under the contract of insurance is not admissible either due to non-fulfilment of the terms of coverage or due to any fraud/misrepresentation.

Know: How to Claim Insurance

Insurance Company  Outstanding at start of the period  Intimated/booked during the period  Paid during the period  Repudiated during the period  Outstanding at the end of the period 
ManipalCigna 4,598 3,45,804 3,10,743 35,045 4,614
Niva Bupa 3,571 2,99,990 2,70,378 27,196 5,987
Aditya Birla Health 6,661 4,13,167 3,87,276 25,970 6,582
Care Health 1,01,901 5,91,736 5,15,853 76,903 1,00,881
Star Health 92,562 17,99,454 14,70,416 3,11,951 1,09,649


Points to Remember

  • Sub-limit: Think of sub-limit as a cap on specific treatments or diseases in your health insurance.
    For example, if your insurance covers robotic surgery, there might be a maximum amount (like 1 lakh) that the insurance company will pay, even if your overall coverage is higher.
    Always read policy details and forms to understand these limits. No sub-limit is the best choice.
  • Cashless: Look for hospitals in your city that offer cashless services with your insurance. It makes the process smoother.
  • Room Rent: Ideally, there shouldn’t be any limit on room rent. This gives you the flexibility to choose a room without worrying about extra costs.
  • No Claim Bonus: If you don’t make a claim, some insurance companies add extra benefits to your coverage. Make sure it’s something valuable.
  • Restoration of Claim: After making a claim, some amount is restored. Unlimited restoration is the best scenario.
  • Riders: Riders are extra benefits that you can add by paying more. Consider options like coverage for pre-existing diseases, critical illnesses, instant coverage, and annual health check-ups.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.
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